Correlation Between IONQ and Markforged Holding

Can any of the company-specific risk be diversified away by investing in both IONQ and Markforged Holding at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining IONQ and Markforged Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between IONQ Inc and Markforged Holding Corp, you can compare the effects of market volatilities on IONQ and Markforged Holding and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in IONQ with a short position of Markforged Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of IONQ and Markforged Holding.

Diversification Opportunities for IONQ and Markforged Holding

-0.24

Correlation Coefficient

IONQ  Markforged Holding

Very good diversification

The 3 months correlation between IONQ and Markforged is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding IONQ Inc and Markforged Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Markforged Holding Corp and IONQ is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on IONQ Inc are associated (or correlated) with Markforged Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Markforged Holding Corp has no effect on the direction of IONQ i.e., IONQ and Markforged Holding go up and down completely randomly.

Pair Corralation between IONQ and Markforged Holding

Given the investment horizon of 90 days IONQ Inc is expected to generate 2.26 times more return on investment than Markforged Holding. However, IONQ is 2.26 times more volatile than Markforged Holding Corp. It trades about 0.01 of its potential returns per unit of risk. Markforged Holding Corp is currently generating about -0.15 per unit of risk. If you would invest  3,206  in IONQ Inc on December 1, 2024 and sell it today you would lose (715.00) from holding IONQ Inc or give up 22.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

IONQ Inc  vs.  Markforged Holding Corp

IONQ Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days IONQ Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, IONQ is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Markforged Holding Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Markforged Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with IONQ and Markforged Holding

The main advantage of trading using opposite IONQ and Markforged Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IONQ position performs unexpectedly, Markforged Holding can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Markforged Holding will offset losses from the drop in Markforged Holding's long position.

The idea behind IONQ Inc and Markforged Holding Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Correlations module to find global opportunities by holding instruments from different markets.